Gila County is seeking a bond issue to pay off a $15.6 million debt to the state retirement system for sheriff’s deputies, detention officers and dispatchers, Supervisor Woody Cline told the Payson Tea Party during a recent campaign appearance.

Cline said the bond issue would allow the county to finance its current estimated debt to the public safety personnel retirement system (PSPRS) at less than 3% annual interest —much below the 7.3% interest the retirement system is currently charging the county to cover the estimated unfunded balance.

The bond issue could save the county $7 million over the next 15 years, he said. County manager James Menlove told the Roundup the savings was around $10 million.

“This is not a debt we created, it is due to state action,” Menlove told the board at a Sept. 22 public hearing on the issue.

“You’re not alone,” said Mark Reader, managing director of Stifel, a brokerage and investment banking firm in Phoenix, which helped the county secure financing for its capital investments/improvement projects last year.

“Statewide, municipalities and counties owe $11 billion,” he said.

The firm recently helped the City of Flagstaff arrange for funds to pay its debt into the Public Safety Personnel Retirement System (PSPRS). Reader said his firm is currently working or is scheduled to work with 40 other municipalities and counties to help them find a solution to meeting obligations to the PSPRS.

Reader and the county staff explored several financing options and considered an Excise Tax Revenue Obligation the best option in which the county obligates a variety of non-property taxes to secure the bond. Seeking a $15.2 million bond, the county would deposit $14.7 million into the pension funds of the GCSO, detention officers and dispatchers.

No decision was made at the Sept. 22 special meeting. The next public hearing on the matter is Oct. 20.

Menlove said the process should be complete before the end of October.

The retirement system for public safety officials toppled into a giant hole during the last recession. The separately run retirement system had devoted any stock market returns above 12% to increasing benefits during the boom years, but then faced a huge deficit when the stock market crashed in the recession.

The courts threw out several efforts to reform the system that allows police and firefighters to receive lifetime, inflation-adjusted retirement benefits after 20 years, even if they continued working or even took a second job within the system. The voters ultimately adopted a constitutional amendment that reduced benefits for those hired after 2018, but left intact the obligation to those hired earlier.

Counties, cities and the state are now paying roughly 60% of each officer and firefighter’s salary into the state retirement system. Payson owes about $12 million, noted Payson Councilor Jim Ferris, who attended the Tea Party meeting along with about 25 other people.

Cline said, “In ’08 when the economy turned upside down and a big chunk of money was lost, it came back on the shoulders of all of you. I don’t think that’s quite fair, but for some reason the governor and I disagree on that. The (PSPRS) board has changed, but there’s still a 35% unfunded liability.”

Cline said he has faith in the current PSPRS leadership, but, “my biggest problem has been, what keeps this from happening again? We have no assurances. We are the first county doing this. The city of Flagstaff was ahead of us. They just bonded. We don’t have a choice.”

Cline also offered an update on millions of dollars in county construction, including a major shuffle of county office space and a big expansion to allow for holding jury trials and more court space in Payson. Currently, the county court facility in Payson is so cramped that the Superior Court must hold all its full jury trials in Globe.

Once the smoke clears on the shifting of county offices, Cline said he suspects the county can sell 27 acres it owns on the north side of the highway next to Gila Community College. The property’s just across the highway from the 254-acre parcel on which the MHA Foundation and the Rim Country Educational Alliance had hoped to build a university and related facilities.

Shifting more overtly into campaign mode, Cline also said the county’s working on a resolution vowing to defend the Constitution — a take off on resolutions adopted by other counties that have declared themselves a “Second Amendment sanctuary,” opposed to any restrictions on the right to bear arms.

Cline’s seeking reelection on Nov. 3 against the opposition of Democrat Bernadette Kniffin, the longtime services director for the San Carlos Apache Tribe in southern Gila County. Cline’s district includes a portion of Payson, Star Valley and Young as well as much of the San Carlos reservation.

Other counties have declared they will not enforce any restrictions on guns in opposition to a movement to adopt “red flag” laws or bans on assault rifles or high-capacity magazines. Red flag laws allow judges to give police the authority to temporarily confiscate the guns of someone considered a danger to themselves or others. Studies of some of those laws have suggested they can reduce the incidence of suicide or spousal murders. Existing law allows the courts to revoke the right to own a firearm if someone’s convicted of domestic violence or other felonies — however the red flag law would allow for the temporary confiscation on much the same basis a judge can issue a warrant — without the defendant able to present their case and without a criminal conviction.

Cline said it makes more sense to declare support for the entire Constitution, rather than just one amendment. “We’re here to protect the Constitution. That’s what we’re supposed to govern by. We see these idiots all over the United States doing things that don’t make sense to me. So we’re going to be looking at covering the whole Constitution.”

“Will there be penalties for violating” the right to bear arms? asked one audience member.

“Hell, yeah. They’ll go to jail,” said Cline. “Our sheriff’s department is 100% behind this. So something comes down from the state, whatever it is, we’re not going to break the Constitution. So let’s say you do it as an individual — I would hope to see you go to jail. All your elected leaders in the county so far have the same feeling. I’ve read the resolutions (from other counties) and some are pretty weak and some of them go way far beyond where it would be hard to regulate it. So ours will be different. It still kind of irks me that we’re doing this — because we’ve already done it” by swearing to uphold the Constitution when they took office.

Cline agreed that all the other constitutional amendments depend on the right to bear arms. “I won’t give up my guns. That’s all there is to it.”

One listener said that Democratic mega-donor George Soros has contributed to prosecutors across the country and is now preventing those prosecutors from jailing demonstrators. “The Democrats want to end elections. They want this to be the last one. That’s what they’re thinking. Those prosecutors in those cities are under the gun of George Soros,” said the listener.

“You’re right. I don’t understand the backing behind it,” said Cline. “I don’t understand the people. How many of us in this room could be bought off like that? Not a single one of us. But that’s in another state I have absolutely no control over.”

Roundup staff reporter Teresa McQuerrey contributed to this story.

Roundup staff reporter Teresa McQuerrey contributed to this story.

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(1) comment

Phil Mason

As any reasonably educated citizen knows, stock market value is simply a mirage that only becomes real when the stock is sold. If the PSPRS lost "money" during the recession, it should be flush in money with the unprecedented increases in stock values since President Trump took office.

Why is it that government lackeys always publicize projected deficits from economic downturns while remaining strangely silent when the economy is experiencing historic growth?

While it is responsible to seek the lowest interest rate possible, I do not understand why funding that problem with existing revenues is not possible.

The county bureaucracy needs to tighten the belt instead of belting the taxpayers with tax increases. Our most at-risk citizens who live on a fixed income deserve consideration and protection from their government.

BTW, while it is a breach of contract to lower benefits to those who are currently in the PSPRS, it should be a top priority issue to address for all new hires.

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